Friday, January 4, 2019


Many of us free-market types bemoan how poorly designed regulation hurts economic growth. But unlike "stimulus," regulation is a death by a thousand knives. Each one seems innocuous, but they add up. It's hard to tell the story without details. There is no handy government statistic on "impact of regulations." We tend to talk about what we can easily measure. Likewise, there is a general sense that the current deregulation effort may be helping, but again without details it's hard to know if this is truth or spin.

In this context, I just learned of an interesting new website at the Brookings Institution that tracks Trump Administration deregulation efforts (HT Daniel Henninger at WSJ).  I get the general sense that Brookings isn't too happy with it and wants to expose removal of useful regulations. But they've done a nice job, so you can read it both ways.

Yes, the big ones you've heard of are there. The Waters of The US Rule, The Coal Fired Powerplants Rule, Title IX, Asylum Seeker restrictions, Fuel Economy standards, lots of rules pecking away at capital standards for financial institutions (so much for procyclical capital!)  and so forth.

It's interesting quite how many are not really Administration deregulations, but compliance with the Supreme court throwing out Obama era regulations. This really is what the Supreme Court battle is about.

It's also interesting actually how short this list is. For all the talk of "deregulation," you would think thousands of individual rules would be on the chopping block.

But I enjoyed this mostly for details for all the little ones you don't read about every day, a little peek into the bowels of the regulatory state.
Affordable Housing Program Amendments 
The Federal Home Loan Bank Act requires each Federal Home Loan Bank to establish an affordable housing program to enable members to provide subsidies for long-term, low- and moderate-income, owner-occupied, and affordable rental housing. 
What? You might have thought Trump officials were going to stage a book burning of that one, but no, it's modest
This proposed rule invites comment on several amendments to the regulations governing Federal Home Loan Banks, among others, giving Federal Home Loan Banks additional authority to allocate their Affordable Housing Program funds and relaxing or streamlining certain regulatory requirements.
Baby steps, baby steps

Letting Youth Work with Patient Lifts
The youth provisions of the Fair Labor Standards Act... HO7 prohibits youth [16 and 17 year-olds] from working in occupations that involve the operation of "power-driven hoisting apparatuses," including a power-driven patient lift--a device that assists patients receiving health care to be transferred between resting places. The DoL claims that patient lifts differ substantially from other equipment that HO7 governs (e.g. forklifts, cranes), and that patient lifts are actually safer than lifting patients manually. In response to bipartisan requests from Congress, the DoL proposed on September 27, 2018 to remove the operation of power-driven patient lifts from the list of activities that HO7 prohibits.
Sensible, and I'm glad to see we can be bipartisan about something. That the Federal Government maintains a list of devices that 16 and 17 year olds may not use, that list includes forklifts, might be turning some Founders over in their graves.

Labor law is a particular nightmare, as anyone who has dared to actually hire someone will quickly tell you
Joint-Employer Standards
Joint-employer standards determine whether two employers are joint employers of a group of employees under the National Labor Relations Act (NLRA). This influences the responsibility and liability that these joint-employers hold towards the employees under labor practices and worker protection laws. Examples of cases where these standards hold relevance are staffing agencies and subcontractors that contract workers to other firms and franchisor-franchisee relationships. 
The rest is appropriately sleep-inducing, but not for labor lawyers who want to make a killing, and in the process kill Uber, locally-owned McDonalds, and unintentionally complete the death of the labor market by anything except very large organizations with big HR and compliance departments.

Experimental Light Sport Aircraft for Flight Training
Only aviation fans will get this one. Yahoo, only about 50 years late.

Small Business HUBZone Program
Historically Underutilized Business Zones (HUBZones) are economically distressed communities where the government seeks to encourage business and promote growth. HUBZone small businesses are those that have a principal place of business located in a HUBZone and 35 percent of their employees residing in one or more HUBZones. The HUBZone program, which was established in 1997, provides contracting assistance to small businesses located in HUBZones. 
On October 31, 2018, US Small Business Administration (SBA) proposed amendments to HUBZone program regulations to reduce regulatory burdens for HUBZone small businesses. The proposal allows employees to be treated as HUBZone residents even if they move to non-HUBZone areas after the certification of the firm. The proposal also eliminates the burden for a HUBZone business to continually demonstrate that they meet all eligibility requirements at the time of each offer and award for any HUBZone contract opportunity. ...amendments are intended to make the program requirements easier to understand and to make it a more attractive avenue for procuring agencies
I read between the lines a classic boondoggle. Huge administrative costs, no impact, obviously too hard to fill out the forms to get "contracting assistance" and 22 years later the economically distressed communities are just as distressed as before. (I welcome correction, I don't know anything about it.)
Transporting Bows and Crossbows Across National Park System Units
Prior to this rule, individuals traversing National Park Service (NPS) areas were allowed to possess bows and crossbows that were "not ready for immediate use" without a permit only if they were using a mechanical mode of transport. Some roads maintained by NPS bisect private property, and are sometimes untraversable with mechanical vehicles. These lands were thus inaccessible for hunters and sportsmen transporting bows and crossbows via mechanical vehicles. On March 2, 2018, NPS proposed a rule that would change this: it would allow individuals traveling on foot and horseback to carry unloaded bows and crossbows without a permit. 
Affirmatively Furthering Fair Housing Rule 
The Fair Housing Act of 1968 calls on federal agencies with activities related to housing and urban development to administer their programs "in a manner affirmatively to further the purposes of" the Fair Housing Act. The Obama administration's Department of Housing and Urban Development (HUD) issued the Affirmatively Furthering Fair Housing (AFFH) Rule in July 2015, fulfilling the unmet mandate of the Fair Housing Act. The rule requires any community receiving block-grant funding from HUD to complete a comprehensive Assessment of Fair Housing (AFH) to analyze its housing stock and come up with a plan for addressing patterns of segregation and discrimination.  
On January 5, 2018, HUD Secretary Ben Carson issued a notice stating that HUD would immediately stop reviewing plans that had been submitted but not yet accepted...the National Fair Housing Alliance sued HUD for illegally suspending the AFFH Rule, which New York State joined on May 14, 2018. 
On May 23, 2018, HUD issued a series of three Federal Register notices... Taken together, these notices effectively nullify the AFFH Rule: ...On June 5, 2018, several states and cities filed an amicus brief opposing HUD's decision to withdraw the assessment tool, and New York State moved to intervene in support of the National Fair Housing Alliance's lawsuit.
Note this is all about governments spending a ton of money to file reports with other branches of government, about promises to be made about, ... I guess future reports and plans, which everybody is suing everybody about. A nice example of how Mark Steyn calls us the "republic of paperwork."

Railroad Noise Emission Badge Requirement Removal

A rule removing the requirement that certain railroad locomotives and associated equipment display a badge communicating information about their noise control certification test.

Calorie Labeling Rule
A rule revising the type size labeling requirements for front of package calorie declarations for packaged food sold from glass front vending machines.
Eliminating Unnecessary Regulations at the Treasury Department
A rule removing regulations related to Treasury programs that are no longer in existence. 
Tip Credit Rule: Partial Rescission
Partial rescission of a rule restricting the pool of employees eligible for tip sharing.
Yes, the Federal Government has detailed laws, rules, and regulations governing exactly how the money in the tip jar at your local Starbucks gets divvied up.

It goes on like this. Browse and enjoy.

Of course I would love a site with similarly accessible description of what the current state of regulation is. But that will wait for another day.


  1. Egads.

    On the other hand, there are sound classic macro economic reasons for pollution controls. The price system does not capture the cost of pollution.

    Additionally, I'm not sure there is a constitutional right to pollute the air that other people breathe or to pollute the water that other people might use downstream.

    I do think that HUD, the Department of Labor, the USDA, the Department of Education, Department of Commerce, and the VA could be sunsetted profitably.

    It is too bad that large nations cannot conduct experiments. That is, we sunset the VA for 10 years, and then assess whether the experiment has worked or not.

    And so many pernicious regulations are local in nature. Property zoning is probably the largest structural impediment in the US economy today, yet is beyond the purview of the federal government.

  2. Well, regulations have plusses and minuses, yes. It somewhat depends on how they're aggregated. Markets do fail, and there's plenty of evidence that they do. And, there's negative externalities that emerge from Free Market activities that can cause harm.

    Enforcement has a cost, sure. It's what makes laws work. Some may seem burdensome and arbitrary, but I suppose that's the sticky wicket. But sometimes I ponder and contemplate how economic growth and positive analysis create a bias that leads to normative analysis that creates a feedback loop in which economics is crushed under its own weight. Positive analysis is useful - but it's like the wheel: can invent it but it can't prescribe how it should be used. Economics can be used for good or for ill.

    It'd be nice if economics could create a sustainable model for order and stability, but again it treads into that realm of who owns what and who deserves what. I'm a fan of the Paretto Efficiency model, but that too has its limitations. Equilibrium, efficiency, and equity amalgamate into a form of idealism I suppose.

    Anyway, yes, we need limits on choice to prevent self-destruction. And, yes, I'm aware that's idealism, too. ;)

  3. "This really is what the Supreme Court battle is about."

    Probably not. It seems that for most Republicans the Supreme Court fight was a hope that judges would roll back protections for women and minorities.

    Most Americans would probably agree that limiting mercury and arsenic emissions and fertilizer run off into wetlands would be a good thing. There are lobby groups who want the court stuffed with appointees who have an ideological prejudice against collective action for the collective good - and so far under Trump those lobby groups seem to be making progress.

  4. Anyone who is against The Coal Fired Powerplants Rule I ask you, is it okay if we put one of those plants near you?

  5. The key to agile governance is to refrain from micro-management. Federal law should only govern what cannot be regulated locally, and it should only do so at a very general level, giving as much leeway as possible to those who apply these principle-based laws (citizens, judges, local enforcement agencies, state parliaments, etc.). Centralistic micromanagement is also one of the big flaws of the European Union. Instead of short, general directives that can serve as guidelines for national laws, the EU tends to nail down every detail already in the directive and fails to provide national parliaments flexibility on how to actually implement the law (that's of course because the EU distrusts the national governments, which is a problem in itself). The problem with this is that it is not possible any more to have laws that take into account local characteristics. Also, EU directives are very slow and painful to adjust in case the future does not unfold as planned (and it rarely does so). The sad part is that, in theory, the EU recognizes these problems and declared subsidiarity to be one of its guiding principles. But somehow it fails to follow its own principles and seems unable to refrain from micro-regulations.

  6. I think there is a more basic reason for deregulation...the need to have effective regulations. As Simon taught us, humans have limited processing power. Thus, each additional regulation should make the existing ones less effective because people can't follow rules they don't know about. If the rulebook is so complex no human can, by nature of biological reality, possibly know all the rules...that seems like a problem.


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